Azernews.Az

By Aynur Jafarova

NATO troops are preparing to leave Afghanistan in 2014. The main issue on the agenda is the political and particularly the economic situation in the country after the troops' withdrawal.

This being said, the Afghan government has determined its main aim: to maintain stability and attract foreign investment to drive economic development.

However, according to some experts, the main obstacles that foreign companies face with investing in the Afghan economy include instability and a high level of corruption in Afghanistan.

The country's government is aware of these problems and is taking steps to solve them. The Afghan Finance Ministry has drafted a package of incentives to assure companies that their investments in Afghanistan will be safe after the expected withdrawal of NATO troops.

According to the incentives, those who invest in the country over the next two years will be provided with significant tax breaks and the right to purchase land for a symbolic price. The main goal is to minimize the predicted impact of the troop withdrawal on the Afghan economy and attract investors, experts believe.

In addition, if some companies are willing to invest but do not have enough money, they will be able to borrow funds from two state-owned banks -- the National Bank of Afghanistan and the Pashtani Tujarati Bankwith low interest rates.

However, some experts are not so optimistic over the attraction of foreign investors, charging corruption and lack of security in the country.

According to Transparency International's Corruption Perceptions Index for 2012, Afghanistan ranks among the three most corrupt countries in the world. Nearly $1 billion of the $8 billion given out in aid over the past decade is said to have been lost to corruption.

However, continuation of financial investment in Afghanistan is essential for the country's progress toward economic self-sustainability.

Nasiruddin Shansab, the head of the U.S.-based Afghanistan-Central Asia Transnational Company, says Afghanistan's natural resources and its geographical location offer great investment potential.

Afghan authorities say manufacturing, mining and agricultural sectors are the most likely areas of investment. The government binds high hopes with similar investments in Afghanistan's lucrative energy and mineral sectors. The country boasts significant copper, iron, gold and oil and gas reserves.

Central Asian countries, in particular, Turkmenistan, Uzbekistan as well as Kazakhstan, are also interested in regional stability and the economic development of Afghanistan. These countries aim to invest in various sectors of the country's economy.

Turkmenistan's role in Afghan growth

Turkmenistan, which shares a border with Afghanistan and is interested in economic development of the country, has played a positive role in Afghanistan's development and reconstruction. It implements regional infrastructure projects. In particular, in accordance with the framework agreement signed between the two countries in May 2011, Turkmenistan helps to construct the Atamyrat Imamnazar-Akina-Andkhoy (Turkmenistan-Afghanistan) railway, which will be a significant transport element for the Eurasian continent.

Ashgabat has delivered humanitarian aid to Afghanistan and cancelled much of Kabul's debt for Turkmen electrical power. Turkmenistan has started implementing a major infrastructure project in the energy sector which will enable an increase in the export volume of Turkmen electricity to Afghanistan. It continues to supply Afghanistan with energy on favorable terms.

The Turkmenistan-Afghanistan-Pakistan-India (TAPI) transnational gas pipeline construction project is among other significant initiatives. Ashgabat believes that laying this pipeline will solve a number of important social and humanitarian issues in the region.

Kabul also believes that this project will be important for the development of the Afghan economy. President Hamid Karzai hopes that the project will create 12,000 new jobs in Afghanistan.

The TAPI pipeline, which will bring Turkmen natural gas from the Dauletabad gas field in central Turkmenistan to Afghanistan and further to Pakistan and India, will provide Afghanistan with 500 billion cubic meters of natural gas for its own consumption.

Afghanistan in Kazakhstan's foreign policy

Stabilization of Afghanistan and its economic rehabilitation are among the most important issues in the foreign policy of Kazakhstan. It indicates serious efforts aiming to facilitate the reconstruction in the country as this issue plays an important role in long-term security, peace and stability in the whole Central Asia region.

In 2006-2009, Kazakhstan undertook a number of steps like humanitarian aid to Afghanistan worth $1 million and creation of the Kazakh-Afghan intergovernmental commission on trade and economic cooperation.

Under the governmental action plan on assistance to Afghanistan for 2009-2011 Kazakhstan allocated $5 million for projects on water supply, infrastructure development and delivery of grains and other commodities.

Kazakh Ambassador to Afghanistan Agybai Smagulov said earlier that Kazakhstan is ready to invest in infrastructure and to extract natural resources such as copper and fuel in Herat province, adding that Herat offers the most suitable conditions in terms of security for investment.

Earlier the president of Azizi ltd. Rahimullah Azizi announced that centers for analysis and forecasting of cooperation with Afghanistan will open in Kazakhstan as well as a website providing comprehensive information on the possibilities of cooperation between the two countries will be launched soon, which will deliver all the necessary information about the economic potential of both countries to Kazakh and Afghan entrepreneurs.

Economic relations with Uzbekistan

Economic relations between Afghanistan and its northern neighbor Uzbekistan remain quite modest. Afghanistan's share in Uzbekistan's foreign trade is about 1.3 percent, while Uzbekistan's share in Afghanistan's foreign trade makes up 3 percent.

According to some experts, neither country properly benefits from the other's economic advantages and the two countries are not making enough effort to expand economic relations.

However, Uzbekistan as well as the other mentioned Central Asian countries aim at stability and development in neighboring Afghanistan. Uzbekistan provides its support to the macroeconomic development of Afghanistan.

According to the agreements signed in 2007 between the two countries, the Uzbek government committed to support Afghanistan in the transit and transportation of goods, construction of highways, agriculture, irrigation and tourism, as well as agreed to increase imports from Afghanistan.

In 2013, Uzbekistan's state railway company plans to begin the construction of a 230-kilometer section of a railway route between Mazari-Sharif and Andkhoy in western Afghanistan.

The Uzbek side is also closely involved in the reconstruction of the Mazari-Sharif-Kabul highway.

During the visit of Uzbek President Islam Karimov to Tehran in 2003, Uzbekistan, Iran and Afghanistan signed a trilateral agreement on the establishment of an international Trans-Afghan transport corridor. In 2008, Uzbekistan and Afghanistan signed a memorandum on the construction of the Hairatan-Mazari-Sharif-Herat part of the transport corridor.

Overall, regional economic cooperation has yet to develop and can become effective only with the successful reconstruction of Afghanistan.